Startup mentors discuss strategies and challenges of creating a new business.

Why I Moved My Tech Startup to D.C.

GUEST MENTOR Blake Hall, CEO of Troop ID, Washington, D.C. Metropolitan Area: Entrepreneurs who wish to build a technology company from scratch require access to four things: Capital, talent, mentors and customers. In the early days of the Internet, Silicon Valley had a clear advantage with respect to capital, talent and mentor network density, but, today, that gap has closed dramatically as the cost of raw infrastructure has dropped in tandem with major engineering productivity increases — allowing angel investors to drive seed-stage investments into small teams of founders who previously faced abysmal odds of getting a shot to build a company.

The result is a wave of innovation sweeping the nation; a phenomenon that allows cities to differentiate themselves based on the nuances of their customer, talent and mentor networks. The Washington D.C. Metropolitan Area, rich in engineering talent and home to many corporations like Hilton and Gannett, offers a healthy ecosystem to support entrepreneurs who can enter the market due to lower entry costs.

I am speaking from personal experience. My company, Troop ID, started in Boston before I picked up and moved to Washington. As I tried to make headway in Boston, I realized that some of the network strengths that make cities successful hotbeds of innovation can sometimes be detrimental to early-stage Washington companies. For example, if you decide to start your company in the Bay Area, then good luck hiring engineers when you’re competing with Google or Facebook.

The same goes for Boston with tech titans Zynga, local dev shops like Thoughtbot and hot startups like Level Up that eat up the best talent in the city, or New York with hot startups like FourSquare and Gilt but without a huge base of engineers. When viewed through that lens, Washington was perfect because I could be a big fish in a small pond, and for that reason my company would be all the more remarkable to the regional press and to the bright people I needed to attract to build my business.

I also knew that to be successful, I needed to convince a bright, talented individual to quit their job and to risk their stability — and the stability of their family — in order to bet everything on one crazy idea, knowing full-well that the empirical data says they will probably fail.

As I considered this problem, I thought about how little I knew about corporate America when I was in college. I assumed that there were brilliant, young engineers who had been lured to Washington and Northern Virginia by government contractors with the promise of a fat paycheck only to find that they hated their job.

I assumed that the pipeline, the situation, locked people into boring jobs in this part of the country rather than blaming those same people for being relatively boring and risk-averse. Sensing opportunity, I then decided that if I couldn’t convince an engineer that, thirty years from now, when their grandchild asks them what they did with their lives, that they’d rather tell them that they took a chance to change the world and people’s lives rather than to complete a legacy database integration project — then I had no business being an entrepreneur.

Government’s ability to spur innovation through access to data and systems also attracted me to Washington. Tim O’Reilly’s leadership in the Gov 2.0 space and the current administration’s forward-leaning stance toward opening up new datasets and APIs represents, in my mind, a slow but sure shift to government as a platform. And, because much of that data has historically been captive in for-profit institutions or inaccessible to citizens at an individual and aggregate level, the shift towards Government as a Platform is incredibly exciting. For Washington-area entrepreneurs, the trend represents an opportunity to engage with policymakers and to shape initiatives in a way that will help spur innovation and growth — to everyone’s advantage.

Washington’s biggest weakness, in my opinion, is the weak capital network. But, fortunately, I believe that’s the easiest “hard” problem that an entrepreneur must solve. By networking with prominent angel investors in New York, Los Angeles and Texas — under the mentorship of one Kelly Perdew — I was able to put together a broad network of investors who had their own networks to open doors to new customers in other cities. In effect, we turned Washington’s weak capital networks into an advantage by pre-positioning investors in strategic markets where we wanted to reach more big customers. Now, led by entrepreneurs like Evan Burfield, Sean Glass and Donna Harris, there is a much healthier financing climate for local, early stage companies.

Innovation is already happening across the country, and it’s happening because entrepreneurs aren’t asking what’s possible — they are risking their hopes, their dreams and their futures in order to prove that it’s possible. Given the lower entry costs in the market and the chance to succeed, Americans will build upon the strengths of their community and giant technology companies will emerge in cities across this country — because that is the American way.

Comments (5 of 5)

Will TroopID be taking legal action against SheerID for stealing their business concept? They look strikingly similar...

1:53 pm February 14, 2013

Donald Trump wrote:

How does one with unlimited assets become a part of this soon to be juggernaut?

8:26 pm January 30, 2013

DCBS wrote:

I'm not angry, and let me express that I commend you for your service and entrepreneurial drive. I just can't stand when people promote something and are less than completely truthful. Thanks for responding and correcting me, and good luck with growing your business.

3:01 pm January 30, 2013

Blake Hall wrote:

DCBS, we're not doing business with the government so none of that preference matters. We're living and dying as a private sector company. Why are you so angry?

1:27 pm January 30, 2013

DCBS wrote:

So I guess Mr. Hall's decision to move to DC had nothing to do with the fact that he's a veteran, runs a veteran-owned business that qualifies for tax breaks and contracting favoritism, and therefore DC is his mecca? Everything else he claims in this piece is trivial. DC has a "weak capital network" but he came here anyway... come on, dude...

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